Spread betting at FXCM

[Jason Rogers]

If anyone's ever had the urge to visit Las Vegas...May 3-4, 2010 is a good time. FXCM will be hosting a forex trading expo during those dates, and all are welcome to attend. I know it's a long distance for non-US based traders, but just throwing it out there for you to know. Plus, you'll have the opportunity to meet me! Here's the workshop schedule http://www.fxcmexpo.com/workshops.jsp

-Jason

 

[Vaco]

from the website:

TAX-FREE TRADING & GENEROUS LEVERAGE
Spread betting is only available for individual investors, and is free of stamp duty and UK capital gains tax.

Does the fact that income tax is not mentioned mean that fxcm's view is that if spread betting is only source of income it is taxable?? would love someone from the firm to give a solid answer.

Something along the lines of: you will not be liable for income tax unless a,b,c or

Yes you would be liable.

I refuse to believe that spread bet firms have not looked into this. some one there must know, the question is will you tell us??

 

[Jason Rogers]

from the website:

TAX-FREE TRADING & GENEROUS LEVERAGE
Spread betting is only available for individual investors, and is free of stamp duty and UK capital gains tax.

Does the fact that income tax is not mentioned mean that fxcm's view is that if spread betting is only source of income it is taxable?? would love someone from the firm to give a solid answer.

Something along the lines of: you will not be liable for income tax unless a,b,c or

Yes you would be liable.

I refuse to believe that spread bet firms have not looked into this. some one there must know, the question is will you tell us??

Hi Vaco,

While we can't give advice on UK taxes and it's application to spread betting, I believe you would lose the tax benefit if trading were your sole source of income. It would be best to consult with a tax advisor proficient in spreadbet taxation for detailed questions.

-Jason

 

[marlintrdg]

Hi Vaco,

While we can't give advice on UK taxes and it's application to spread betting, I believe you would lose the tax benefit if trading were your sole source of income. It would be best to consult with a tax advisor proficient in spreadbet taxation for detailed questions.

-Jason

From the Pages of Wikipedia;

http://en.wikipedia.org/wiki/Spread_betting

Tax treatment

Profits from financial spread betting are currently free from Capital Gains Tax whatever the trader’s personal circumstances, and also Income Tax for those who can demonstrate they have another source of income on which they are able to support themselves financially. If a trader relies solely on their profits from financial spread betting to support themselves, they may be required to pay Income Tax on those profits.
======================================================================
Now that just seams silly to me, why SB if you end up paying the much, much higher Income Tax? This must be wrong.

 

[Vaco]

Hi Vaco,

While we can't give advice on UK taxes and it's application to spread betting, I believe you would lose the tax benefit if trading were your sole source of income. It would be best to consult with a tax advisor proficient in spreadbet taxation for detailed questions.

-Jason

Thanks for the reply Jason,

This would indicate that spreadbetting is aimed at the hobbyist/part time trader although i'm sure there are prob ways to use spread betting to reduce your tax burden.

As for tax advisors profcient in spreadbet taxation....you wouldn't happen to have the no for any of those would you?

 

[Jason Rogers]

Thanks for the reply Jason,

This would indicate that spreadbetting is aimed at the hobbyist/part time trader although i'm sure there are prob ways to use spread betting to reduce your tax burden.

I think your reasoning is right on the mark.

As for tax advisors profcient in spreadbet taxation....you wouldn't happen to have the no for any of those would you?

Afraid not unfortunately

 

[forker]

as far as i know you can maintain tax free on all your profits with spread betting as long as it isnt your only income. so if you can organise a part time job or "arrangement" that is enough to live off then you can pay tax on that as income and the profits from spread betting are your gambling profits exempt from tax

 

[marlintrdg]

Jason,

When did you add indexes metals & oil to the SB platform? I didn't get the memo, I like it!

However the spreads are really quite painful.

In my old job we had a saying,
"if the customers are complaining and ain't buying, then the price is too high",
"If the customers are lining up outside the door and buying everything you got and not complaining, then the price is far too low",
BUT
"if the customer is complaining BUT still buying well that's the right price".

Work on the last line, you should be able to at least match CS.

Shame about the taxes on Spreadbetting for full-time traders eh?
I always though it was to good to be true. I still like SB for testing new systems with real money though.

mar,
btw I've given up waiting on fxcm+sb & MT4 I'll use what you have when the spreads get fixed.

 

[Jason Rogers]

Jason,

When did you add indexes metals & oil to the SB platform? I didn't get the memo, I like it!

However the spreads are really quite painful.

In my old job we had a saying,
"if the customers are complaining and ain't buying, then the price is too high",
"If the customers are lining up outside the door and buying everything you got and not complaining, then the price is far too low",
BUT
"if the customer is complaining BUT still buying well that's the right price".

Work on the last line, you should be able to at least match CS.

Shame about the taxes on Spreadbetting for full-time traders eh?
I always though it was to good to be true. I still like SB for testing new systems with real money though.

mar,
btw I've given up waiting on fxcm+sb & MT4 I'll use what you have when the spreads get fixed.

Hi mar,

We added the indexex, metal and oil last month. Good to hear you like it!

Last week we reduced spreads on some of the products. Here's the list of the products with the old spread and what it has changed to:

USOil
Old: 8
New: 5

SPX 500
Old: 8
New: 5

NAS100
Old: 3
New: 2

UK 100
Old: 2 (4)
New: 2 (3)

GER30
Old: 2 (4)
New: 2 (3)

FRA40
Old: 4
New: 2 (3)

JPN225
Old: 25
New: 15

AUS200
Old: 4
New: 2 (4)

As always, the oil, metal and index products have no re-quotes.

-Jason

 

[marlintrdg]

Hi Jason,

WS30 @ 4 points is a little high, WS has it at 2pts & WD CFD has it at 1pt I could live with 3pts I guess, 2pts would be great.

It looks like your outfit is getting allot of attention as I have never had so many emails and mailings in the post from the other SB Co's in all the time I've been using Spreadbetting, Gotta love competition eh?

I take it your CFD platform is the same setup & spreads?

mar.

 

[Jack Hughes]

Hi Jason,

WS30 @ 4 points is a little high, WS has it at 2pts & WD CFD has it at 1pt I could live with 3pts I guess, 2pts would be great.

mar.

Yep, WS and GFT still have 2pt Dow spread, and you can get 1pt DAX, FTSE and EUR/USD with various others, with virtually no requotes

 

[marlintrdg]

Yep, WS and GFT still have 2pt Dow spread, and you can get 1pt DAX, FTSE and EUR/USD with various others, with virtually no requotes

WS emailed me this morning saying their finally going to fix their platform to have stops & tp when you place a limit or market order, been waiting 3 years for that! Gotta love competition.

 

[Jason Rogers]

Hi Jason,

WS30 @ 4 points is a little high, WS has it at 2pts & WD CFD has it at 1pt I could live with 3pts I guess, 2pts would be great.

It looks like your outfit is getting allot of attention as I have never had so many emails and mailings in the post from the other SB Co's in all the time I've been using Spreadbetting, Gotta love competition eh?

I take it your CFD platform is the same setup & spreads?

mar.

Hi mar.

Yes, the spreadbet and cfd platforms both have the same setup and spreads.

I've noticed the same as well in terms of more emails. I sign up for everything

-Jason

 

[Jack Hughes]

WS emailed me this morning saying their finally going to fix their platform to have stops & tp when you place a limit or market order, been waiting 3 years for that! Gotta love competition.

They need to fix a lot more than that, I think!

 

[marlintrdg]

They need to fix a lot more than that, I think!

Hi Jack, care to elaborate?, I haven't used them in sometime and was thinking of giving them a try again when there new whizzbang platform is released.

WS thread is over here: http://www.trade2win.com/boards/spread-betting/26914-worldspreads-7.html

No seance crowding FXCM's thread with WS stuff.

tks in advance
mar.

 

[hackenbush78]

Jason and all, apologies if this has been asked and answered before, but I only had time to flit through the entire thread.

I've been considering opening an account at FXCM and started an application form. It appears that the minimum deposit to start an account is £300. It then goes on to state and I quote "£300 to Open 10,000 Trade Size".

If the 10,000 mentioned refers to sterling and I presume it does, that is a gearing ratio of 33:1 ...quite different from the 200:1 ratios that are mentioned elsewhere on the website.

Is it the case that £300 is the minimum deposit, 10,000 is the lowest denominated trading amount and one should not read anything into their ratios as a precedent for trading when higher amounts are deposited ?

Or, if one were to deposit £1000 or £5000 persay, would that 33:1 ratio be the same ?

 

[PadderFX]

Hi Jack, care to elaborate?, I haven't used them in sometime and was thinking of giving them a try again when there new whizzbang platform is released.

WS thread is over here: http://www.trade2win.com/boards/spread-betting/26914-worldspreads-7.html

No seance crowding FXCM's thread with WS stuff.

tks in advance
mar.

FXCM are the kings of slippage if using a standard account..

 

[marlintrdg]

Jason

Is there an easier way to do "Simple OCO Orders" or "Complex OCO Orders"? http://www.fxcm.co.uk/order-types.jsp

Thats far too much fussing about to do something so simple and by the time one get that order placed the move is long gone.

mar.

 

[Jason Rogers]

Jason and all, apologies if this has been asked and answered before, but I only had time to flit through the entire thread.

I've been considering opening an account at FXCM and started an application form. It appears that the minimum deposit to start an account is £300. It then goes on to state and I quote "£300 to Open 10,000 Trade Size".

If the 10,000 mentioned refers to sterling and I presume it does, that is a gearing ratio of 33:1 ...quite different from the 200:1 ratios that are mentioned elsewhere on the website.

Is it the case that £300 is the minimum deposit, 10,000 is the lowest denominated trading amount and one should not read anything into their ratios as a precedent for trading when higher amounts are deposited ?

Or, if one were to deposit £1000 or £5000 persay, would that 33:1 ratio be the same ?

Hi hackenbush,

Thanks for the post and happy to help.

The 200:1 leverage figure refers to the the maximum amount you are able to gear (or leverage) each individual position. For example when trading 10,000 of GBP/USD, you are leveraging £50 of your balance 200 times to trade a position of 10,000 GBP/USD.

£50 is the margin requirement to trade the 10,000 GBP/USD position. The remaining £250 is leftover to guard against losses or open new positions if you so choose.

You are also correct that the overall gearing ratio for the account would be 33:1 if you traded 10,000 in a £300 pound account.

-Jason

 

[Jason Rogers]

FXCM are the kings of slippage if using a standard account..

Hi Padder,

Slippage is possible for the forex trades. FXCM is not making a market for the standard accounts and therefore cannot guarantee the execution of the trade since the orders are filled at the best available price from the 10 banks quoting on the platform. Trading around news events or when the market is very volatile would increase the chances of slippage.

Controlling slippage...

When placing a market order to open a position or close a position, you can select between two order types: At Best and Market Range. The At Best order type will ensure your order executes every time, but it will go through at the best price available. Meaning slippage is possible. The Market Range option lets you enter a pip amount for the range of slippage you are willing to accept. If you select 0, it means you are only willing to accept the price you click on. If the price you clicked on is no longer available, the order is rejected. Increase the range to 2 and the order will fill at the best price within +/- 2 pips of what you click on. If the best available price is 3 pips away, the order is rejected. And so forth...

-Jason